Gov. Corbett's stealth tax hike

For the first time, Pennsylvania residents face paying sales taxes on everything they buy online under a recent decision by the state Department of Revenue. This amounts to a tax increase that skirts the legislative process, threatens to cost thousands of state residents their jobs, and stretches the state's constitutional authority. And while it was effected by bureaucrats, the responsibility for this tax hike should fall squarely in the lap of the state's chief executive, Gov. Corbett.

Administration officials argue that they are simply "clarifying" current law to require online and other out-of-state retailers who sell to Pennsylvanians to collect sales taxes. To do so, they relied on a vague state tax law that may be unconstitutional.

The law says, for example, that Pennsylvania can force a company to comply with its tax laws if it has "any contact within this Commonwealth which would allow the Commonwealth to require a person to collect and remit tax under the Constitution of the United States." Any contact? That gives the state extraordinarily broad powers.

The governor and the Revenue Department should be trying to restrain such dangerously nebulous tax laws. Instead, they are using them to justify new and constitutionally questionable taxes.

Supreme Court rulings in two cases, National Bellas Hess v. Illinois and Quill Corp. v. North Dakota, established a physical presence rule for tax collection: If a retailer does not have a physical footprint in a state, it is a violation of the Constitution's interstate commerce clause to force the seller to collect that state's taxes.

Yet under Pennsylvania's newly announced policy, an out-of-state business that merely advertises online in the state - physical footprint or not - must now collect sales taxes from Pennsylvanians. This stretches Supreme Court precedents to say the least.

The surprise move also completely circumvented the legislative process. Seven Democratic-leaning states - including New York, Illinois, and California - have passed similar measures, but they at least invited public discussion of the idea and subjected it to the scrutiny of elected representatives. Corbett and the Department of Revenue, by contrast, opted to unilaterally impose higher taxes through administrative fiat and without transparency.